Debenhams could be the latest retailer to undergo a company voluntary agreement (CVA) as it flies in the help of accountancy firm KPMG to push forward a restructure.
The struggling retailer has enlisted the help of KPMG to explore a number of options to help it reduce costs and boost sales, following a torrid year for department stores.
Though a number of options are reportedly being tested, it is understood that Debenhams could undergo a CVA which if approved could see it shut a number of stores and significantly reduce rents on others.
Last month Debenhams announced that it was launching a redundancy consultation with hundreds of staff, expecting around 90 to face the axe across its fashion and home departments, stripping out layers of management.
At the beginning of the year Debenhams, which expects full year profits to drop from £50.3 million to between £35 million and £40 million, slashed 320 store management roles.
This year alone Debenhams has launched three profit warnings and has already launched a major cost cutting drive expected to save the retailer around £20 million a year.
“Like all companies, Debenhams frequently works with different advisors on various projects in the normal course of business,” it stated.
Mike Ashley, who owns nearly 30 per cent of Debenhams, is rumoured to be considering a takeover bid.
Following Ashley’s recent acquisition of the embattled department store House of Fraser, many have speculated Debenhams and House of Fraser could be merged by the retail mogul.
Despite these speculations giving Debenhams’ share prices a much needed boost, their value has divebombed a by two thirds since the start of the year.